Appointment of Internal Ombudsman by NBFCs

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Dec 31, 2021

Appointment of Internal Ombudsman by NBFCs

The RBI on November 15, 2021(‘NBFC Ombudsman Circular’) directed certain categories of non-banking financial companies (‘NBFCs’) (i.e., deposit taking NBFCs with 10 or more branches, and non-deposit taking NBFCs with an asset size of Rs 50,000,000,000 (approx. US$ 669.5 million) and above and having public customer interface) to appoint an Internal Ombudsman (‘IO’) within a defined timeline as set out in the NBFC Ombudsman Circular. Certain specified classes of NBFCs were also excluded from compliance with the NBFC Ombudsman Circular.

IOs are empowered to deal with complaints that have already been examined by the concerned NBFC but have been partly or wholly rejected by the NBFC, and not complaints received first-hand by the IO directly from customers or the public. Certain categories of complaints are also excluded from the purview of the IO as set out in the NBFC Ombudsman Circular.

NBFCs have been directed to formulate a Board-approved standard operating procedure and to establish such system for the functioning of the IO in the manner prescribed in the NBFC Ombudsman Circular.

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